On December 1, 2020, the TSX Venture Exchange (the “TSXV”) announced changes to its Capital Pool Company (“CPC”) program found in Policy 2.4 Capital Pool Companies which according to the press release accounted for almost 50% of new TSXV listings over the past 10 years. The CPC program provides entrepreneurs, whose growth and development-stage companies require capital and public company management expertise, with access to investors with financial market experience.

The following components of the TSXV’s Corporate Finance Manual are being amended:

  • Policy 2.4 – Capital Pool Companies
  • Form 3A – Information Required in a CPC Prospectus
  • Form 2F – CPC Escrow Agreement
  • Form 3B1 – Information Required in an Information Circular for a Qualifying Transaction / Form 3B2 –  Information Required in a Filing Statement for a Qualifying

According to the press release the new changes will take effect on January 1, 2021 and will provide:

  • Increased flexibility – new jurisdictions added, residency restrictions eased, spending restrictions simplified
  • Reduced regulatory burden – relaxed requirements on shareholder distribution and shareholder approval, fewer restrictions on PRO subscriptions
  • Improved economics – increased seed investment, finders fees, shorter escrow

The amendments are expected to become effective on January 1, 2021.

For more information please see: https://www.tsx.com/news?id=798&year=2020

For more information, please call Barbara Hendrickson at BAX Securities Law (647) 403-4606.

This publication is not intended to constitute legal advice. No one should act on it or refrain from acting on it without consulting with a lawyer. BAX does not warrant or guarantee the accuracy or currency or completeness of the publication.  No part of this publication may be reproduced without the prior written permission of BAX Securities Law.